WASHINGTON (dpa-AFX) - Crude oil futures settled higher on Tuesday, lifted by the Energy Information Administration's forecast of a drop in oil production and the International Energy Agency's forecast about increased demand from China.
A weak dollar contributed as well to the rise in oil prices. The dollar dropped to a 2-month low after comments from several Fed officials suggested the U.S. central bank is nearing the end of its rate-hiking cycle.
West Texas Intermediate Crude oil futures for August ended higher by $1.84 or about 2.52% at $74.83 a barrel.
Brent crude futures were up $1.78 or 2.29% at $79.47 a barrel a little while ago.
The EIA has cut its forecast for U.S. oil production by 50,000 barrels per day this year following the OPEC+ extending output cuts through 2024.
In its Short Term Energy Outlook, the EIA said oil production will likely rise by 670,000 barrels per day this year.
The EIA also said that it expects Brent crude spot prices will average $78 a barrel this month.
Meanwhile, the IEA expects oil market to remain tight in the second half of this year due to strong demand from China and other major consumers, and due to additional supply cuts announced by Russia and Saudi Arabia.
Traders now await weekly oil reports from the American Petroleum Institute (API) and EIA. The API's data is due later today, while the EIA will release its crude inventory data Wednesday morning.
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